Santander bank profits rise sharply for second quarter

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Europe's biggest bank, Santander, saw its second quarter net profits jump sharply to 1.05bn euros (£910m, $1.39bn) from 123m euros a year ago.

Last year profits were seriously dented by a one-off charge of 1.3bn euros to cover losses for Spanish property.

However, profits fell sharply in key divisions.

Meanwhile, official figures showed Spain's steep economic downturn all but halted as gross domestic figures showed a fall of 0.1% in the second quarter.

The country's economy shrank 0.5% in the first three months of this year.

It has been in and out of recession since the credit crisis, which took hold in 2008 and led to Spain's banks needing support of 42bn euros.

"We're not counting on a further improvement in the third quarter and are very sceptical of any statement that the recession in close to being over," said Ebrahim Reheari, an analyst at Citi in London

'New era'

Last year, Santander wrote off almost 19bn euros for bad debts and falling property values in Spain.

Spain's property market slumped during the credit crisis.

Profits from its operations in Latin America, were sharply lower, down 16% in the six months to June, a reflection of the foundering economic health of those countries.

The bank makes about half its profits from the region, which until recently was among the fastest growing in the world.

The bank, which is Spanish-based, made a net profit of 2.25bn euros for the first half of the year, a 29% increase on the same period last year.

Santander's chairman, Emilio Botin, hailed a new era for the bank: "Profits rose after more than two years of high levels of write-offs and reinforcement of capital. We are preparing for a new period of profit growth."